TEXT-Fitch:U.S. CREL CDO delinquencies drop back down below 13%

Fri Feb 15, 2013 9:03am EST

Feb 15 - Delinquencies on U.S. CREL CDOs began 2013 lower, according to the latest index results from Fitch Ratings.

Following a sharp spike late last year, CREL CDO late-pays fell for a second straight month to 12.7% last month (from 13.4% in December). New delinquent assets in January consisted of only two term defaults, one matured balloon loan, and one credit impaired security.

The largest new delinquency is a term default on a B-note and mezzanine debt backed by a 410,000 sf Atlanta office building. Property cash flow declined significantly after the largest tenant (37% of NRA) vacated the property at the end of October 2012.

In January, asset managers reported approximately $50 million in realized principal losses from the disposal of several assets. The largest reported loss was a 33% realized loss on the discounted sale of a 350,000 sf REO office property located in San Diego, CA. Foreclosure occurred in December 2011, and the loss was anticipated at last rating action for the transaction.

Additional information is available in Fitch's weekly e-newsletter, 'U.S. CMBS Market Trends', which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter:

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